Closing Lockheed Martin‘s [LMT] F-22 Raptor production line outright and then reactivating the dormant line at a later time would cost the Air Force between $225 million and $720 million, with the most likely figure close to $450 million, RAND estimates in new study conducted on behalf of the service.
The cost estimates of this shutdown-restart scenario vary due to factors such as how much funding would actually be required to preserve tooling, retain the workforce, and requalify parts suppliers, RAND concludes.
This scenario would be the most expensive of three models that RAND explored for the Air Force to acquire 75 additional F-22s beyond the current 183-aircraft program of record. Continuing F-22 manufacture after 183, but at reduced rates–referred to as “warm” production–would be comparatively less expensive. But the most economical method would be to keep assembling F-22s at the current rate of 20 per year until all 75 are built, RAND reports.
Indeed, RAND estimates that it would cost the Air Force $19 billion to acquire the 75 jets under the shutdown-restart model, $17.7 billion under warm production, and $13.7 billion if Lockheed Martin keeps churning out the jets at its assembly facility in Marietta, Ga., at the current rate. The average flyway unit cost of the 75 aircraft under each scenario would be $200 million, $170 million, and $145 million, respectively, RAND finds.
As a note of comparison, the current F-22 program of record has a total estimated cost of $64.5 billion, according to the Pentagon’s most recent selected acquisition reports issued in April for the period of October through December 2007.
Under the shutdown-restart model, no new orders would be placed in FY ’10 or FY ’11. Production activities would resume in FY ’12 with orders for five F-22s, followed by 10 in FY ’13, and then 20 each year in FY ’14, FY ’15, and FY ’16, RAND states.
The warm-production option involves the Air Force buying five F-22s each year in FY ’10, FY ’11 and FY ’12, 10 aircraft in FY ’13, 20 per year in FY ’14 and FY ’15, and finally 10 jets in FY ’16, according to RAND.
If production is continued at the current rate, the Air Force would procure 20 aircraft each year in FY ’10, FY ’11, and FY ’12, and then 15 in FY ’13 to complete the acquisition, RAND states.
If ultimately no F-22s are built beyond Lot 9, which will culminate the 183-airframe acquisition, RAND’s analysis shows that the cost of shuttering the Raptor production line most likely would be $85 million, but could range from as low as $65 million to a high end of $110 million.
Conversely, terminating the warm production line after its 75-aircraft run would cost $140 million, while closing the line after 75 more jets if they are built at the current rate of 20 per year would cost $95 million, RAND states. The shutdown-restart scenario would actually entail a second closure of the line, upping the $450 million estimate to $555 million, RAND notes.
The Air Force has steadfastly maintained that it needs 381 F-22s to meet the requirements to execute the US warfighting strategy under future projected scenarios. But the Pentagon leadership has capped the Raptor program at 183 aircraft, saying there are more pressing needs across the US military and preferring to see the Air Force spend its future tactical aviation dollars on the F-35 stealth fighter, also produced by Lockheed Martin (Defense Daily, Feb. 7 and March 12).
Accordingly, the Air Force’s FY ’09 budget request does not contain any funding to buy the long-lead-time materials and components for any F-22s beyond 183. This funding would be necessary to maintain a smooth flow of the production line and prevent a disruption that would spike costs if there is a break in orders.
Instead the budget proposal includes solely the $3 billion to procure the 20 Raptors that Lockheed Martin is already scheduled to start building in FY ’09 under Lot 9. This tranche is the final annual increment under the existing three-year multiyear procurement arrangement with Lockheed Martin for the final 60 of the 183 aircraft.
But in an effort not to preempt the desires of the next presidential administration, Defense Secretary Robert Gates purposely did not include funds in the budget request to terminate the F-22 production line. Further, Gates’ office said it would include a request for four additional F-22s in a war supplemental funding bill in FY ’09 to buy some time for the next president to decide (Defense Daily, Jan. 17). However, the White House did not request the four F-22s in its subsequent FY ’09 war supplemental request, and Congress did not add any F-22 funds to the final FY ’08-FY ’09 supplemental bill signed into law July 1 (Defense Daily, May 22 and July 1). The bill includes money for war operations until next summer
The Air Force FY ’09 unfunded requirements list (URL) includes a $600 million request for these four F-22s.
While the Office of the Secretary of Defense appears satisfied with this approach, Air Force and Lockheed Martin officials have said an order for these four aircraft would only keep the line active for several months and not bridge the entire gap until the next presidential administration is in place next year and able to render its choice.
In fact, the Air Force and Lockheed Martin have said new orders are required by November to keep the line flowing smoothly (Defense Daily, Feb. 14 and April 10). Otherwise, barring new orders, Lockheed Martin would have no new work for some subvendors that provide raw materials and long-lead-time components at the front end of the Raptor’s roughly 30-month production cycle and would start to sever ties with them.
So far lawmakers have been supportive of the Air Force’s desire to keep the production line going beyond Lot 9. The House passed its version of the FY ’09 defense authorization bill on May 22. It provides the $3 billion for Lot 9 and also included $523 million to be applied towards the advanced procurement of items for 20 aircraft that would be built in Lot 10 (Defense Daily, May 8). (The Air Force’s URL also includes a $497 million listing for long-lead funding for a Lot 10 of 20 F-22s.)
The Senate Armed Services Committee also supported the funding for Lot 9 and provided the $497 million that the Air Force requested, but with the caveat that it lies with the next president to determine whether these funds go towards Lot 10 or are applied to shutting down the production line (Defense Daily, May 2). The Senate has not yet voted on its version of the authorization bill.
Boeing [BA] is also involved in F-22 production, building the wings and aft fuselage. Pratt & Whitney [UTX] builds the aircraft’s F119 engines.
Tension with Gates over the F-22 issue contributed to the series of events that culminated with the forced resignations of Air Force Secretary Michael Wynne and Chief of Staff Gen. Michael Moseley on June 5. Wynne admitted such in his final meeting with reporters on June 20, his last day in office, saying “I advised the Secretary that I was not with him on the F-22 budget.”